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Property Taxes by State: Complete 2026 Guide
Property taxes are a major expense for homeowners " — the average American pays $2,690/year, but rates vary dramatically by state. A $300,000 home costs $810/year in Hawaii but $7,800/year in New Jersey. Understanding property taxes is critical when buying a home or relocating.
Property Tax Rates by State (Top 15 Highest)
| Rank | State | Avg. Effective Rate | Avg. Annual Tax ($300K home) |
|---|---|---|---|
| 1 | New Jersey | 2.60% | $7,800 |
| 2 | Illinois | 2.27% | $6,810 |
| 3 | New Hampshire | 2.20% | $6,600 |
| 4 | Vermont | 2.11% | $6,330 |
| 5 | Connecticut | 2.02% | $6,060 |
| 6 | New York | 1.99% | $5,970 |
| 7 | Pennsylvania | 1.81% | $5,430 |
| 8 | Rhode Island | 1.72% | $5,160 |
| 9 | Ohio | 1.62% | $4,860 |
| 10 | Iowa | 1.57% | $4,710 |
Property Tax Rates by State (Top 10 Lowest)
| Rank | State | Avg. Effective Rate | Avg. Annual Tax ($300K home) |
|---|---|---|---|
| 1 | Hawaii | 0.27% | $810 |
| 2 | Alabama | 0.39% | $1,170 |
| 3 | Colorado | 0.51% | $1,530 |
| 4 | South Carolina | 0.53% | $1,590 |
| 5 | Utah | 0.55% | $1,650 |
| 6 | Nevada | 0.55% | $1,650 |
| 7 | Arizona | 0.62% | $1,860 |
| 8 | Idaho | 0.63% | $1,890 |
| 9 | Delaware | 0.67% | $2,010 |
| 10 | District of Columbia | 0.71% | $2,130 |
How Property Taxes Are Calculated
Property tax = Assessed Value × Tax Rate (millage rate)
- Assessed value: The county assessor's estimate of your property's market value (may be lower than actual market value in some states)
- Tax rate: Set by local government based on budget needs. Varies by county, city, and school district
- Millage rate: expressed in "mills" " — 1 mill = $1 of tax per $1,000 of assessed value
How to Lower Your Property Taxes
- Homestead exemption: Available in most states " — reduces taxable value by $10,000-$50,000+. File with your county assessor.
- Appeal your assessment: If your assessed value is higher than your home's actual market value, file an appeal. Bring comparable sales data.
- Senior/Disability exemptions: Many states offer additional exemptions for seniors (65+) or disabled homeowners.
- Check for errors: Review your property record for incorrect square footage, lot size, or number of bedrooms
- Renovation exemptions: Some states cap assessed value increases after renovations
- Move to a lower-tax area: Moving from New Jersey ($7,800/year) to Alabama ($1,170/year) saves $6,630/year on a $300K home
Property taxes are deductible: You can deduct up to $10,000 in state and local taxes (SALT), including property taxes, from your federal income taxes. If your property taxes + state income taxes exceed $10,000, you only get the $10,000 cap. Use Schedule A when filing your federal return.
⚠️ Watch for reassessment:
- Property taxes often increase after a home sale " — the assessed value may be reassessed at the purchase price
- Some states cap annual increases (e.g., California's Prop 13 limits increases to 2%/year)
- Appeal within 30-60 days of receiving your assessment notice if you believe it's too high
The bottom line: Before buying a home, check the local property tax rate " — it can add $200-650/month to your housing costs. Always file for homestead and any other applicable exemptions. If your assessment seems high, appeal with comparable sales data. Moving from a high-tax state to a low-tax state can save thousands per year on the same home.